White v Minnis and Another
| Jurisdiction | England & Wales |
| Judgment Date | 05 May 2000 |
| Date | 05 May 2000 |
| Court | Court of Appeal (Civil Division) |
COURT OF APPEAL
Before Lord Justice Peter Gibson, Lord Justice Chadwick and Lord Justice Mance
Partnership - death of partner - method of valuing his share of assets
Where following the death of a partner the assets of a partnership fell to be distributed according to the terms of the partnership agreement, there was no presumption, at least in the context of a family partnership, that the deceased partner's share in those assets was to be calculated by reference to their true current market value and not to their historic cost.
The Court of Appeal so stated when allowing an appeal by the defendants, Linda Minnis and Bernard White, executors of Lawrence White, against an order of Mr Justice Park (The Times January 18, 1999; (1999) 1 WLR 2079) that on the death of Dennis White in 1993 his share in the capital of the partnership between him and his brother Lawrence, to which, under the terms of the partnership deed, his estate, of which the plaintiff, Olive White, was adminstratrix, became entitled, and which included a freehold property which had been carried in the partnership books at its historic (1930s) cost, fell to be calculated by the 1993 market value of that property.
The defendants argued that the correct approach was to use the historic cost of the property in determining the plaintiff's share of the assets.
In 1899 the brothers' father started a business and in 1949 replaced a previous deed of partnership between himself, his sons, Dennis and Lawrence, and his daughter to continue for seven years.
On his death in 1950 the partnership continued and in 1956 it was renewed. In 1961 the three surviving partners executed a dissolution agreement under which the daughter retired but the business was to continue.
Between Dennis's death in 1993 and Lawrence talking his son into partnership in 1994 Lawrence was the sole proprietor. On Lawrence's death his son was the sole proprietor. Between 1961 and 1993 the freehold of the business site was owned equally by Dennis and Lawrence.
Miss Sonia Proudman, QC and Mr Alistair Craig for the plaintiff; Mr George Laurence, QC and Mr Gordon Bennet for the defendants.
LORD JUSTICE CHADWICK said that under the agreement the scheme was that the payment to the deceased partner's estate comprised two elements (i) his share in the capital of the partnership, valued on the basis of the last general account and (ii) his share of the profits earned by...
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